Story by Kayode Tokede
Ecobank Transnational Incorporated (ETI) Plc, FBN Holdings plc, FCMB Group Plc and four other commercial banks quoted on the Nigerian Stock Exchange (NSE) raked in a total of N169.89 billion from customers through fees and commission income in Half year (H1) ended June 2019, figures compiled by Nigerian NewsDirect have revealed.
The amount realised by these seven commercial banks represented an increase by 14 per cent compared with the N148.6 billion realized in prior half year unaudited result and accounts.
Other unaudited| results reviewed by our correspondent were those of Sterling Bank plc, Union Bank of Nigeria plc, Unity Bank and Wema Bank plc.
Analysts have predicted that the commercial banks would be aggressive in fees and commission income from customers as they continue to contend Central Bank of Nigeria (CBN) exposure to government treasury bills.
The fees and commission income by the banks were derived from account maintenance fees, fees from electronic banking channels, ATM charges, letters of credit commission, remittances fees, card-based fees, fees from brokerage commission, financial advisory fees, among others.
According to our correspondent findings, ETI, because of its spread on the continent, recorded the highest fees and commission from customers in the period under review of N85.15 billion, up by 10 per cent from the N77.2 billion it made the previous H1, and it was followed by FBN Holdings, which posted fees and commission income of N49.49 billion in H1, up by 19 per cent from the N41.66 billion reported in H1 2018.
Also, the FCMB which posted fees and commission income of N14.2 billion in the review half year period, higher than the N13.01 billion the bank realised in H1 2018, just as Sterling Bank posted fees and commission income of N9.75 billion in H1 2019, higher than the N6.89 billion recorded in H1 2018; while Unity Bank garnered N756.39million as fees from customers in H1 2019, higher than the N750.49 million it recorded in H1 2018.
In the same vein, while Union bank of Nigeria reported net fees and commission of N6.67 billion in H1 2019, up from N6.01 billion the previous half year and Wema bank got N3.76 billion as fees and commission income from customers in H1 2019, up from the N3 billion it attained in H1 2018.
Fitch Ratings had stated that Nigerian banks may find it difficult to sustain their profitability this year, given the decline in net Treasury Bill issuance by the federal government.
Our correspondent gathered that Nigerian banks were highly reliant on net interest income to remain profitable.
Fitch had stated that its rating outlook for the Nigerian banking sector was negative, forecasting that some tier 2 banks would struggle to remain profitable this year.
“We expect falling treasury bill yields and lower issuance to put pressure on Nigerian banks’ profitability,” it added.
Also, Moody’s Investors Service in its latest outlook on Nigerian banks also noted that the declining yields on government securities would dampen banks’ core earnings.